A Minimum Wage

question 39

Multiple Choice

A minimum wage

• A) increases all workers' surplus because the wage rate increases.
• B) increases consumer surplus because the price of the good decreases.
• C) decreases the firms' surplus because fewer workers are hired at the higher wage.
• D) increases the firms' surplus and the workers' surplus because it increases the efficiency of the labor market.
• E) None of the above answers is correct.

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Definitions:

Salvage Value

The anticipated market value of an asset after its period of utility has ended.

Payback Period

The duration required for an investment to produce income or cash flow that matches the investment's initial cost.

Incremental Net

The net change in financial outcomes resulting from a particular decision or action, considering only the relevant costs and benefits.

Useful Life

Useful life is the estimated time period that an asset is expected to be useful for the operations of a business before it is fully depreciated.